Greek bailout talks with auditors begin

Athens: Senior EU-IMF auditors has held their first meetings with Greek ministers to finalise a new three-year bailout as the Athens stock market prepares to reopen after being shut down for over a month by the debt crisis.

Greece's main stock exchange in Athens will resume operations, which were halted on June 26 as the crisis-hit government imposed capital controls, on Monday, a finance ministry source said.

Meanwhile as the bailout talks got under way, the International Monetary Fund set its terms saying it would only join a "comprehensive" financial rescue programme that included debt relief and economic reforms.

"In order to ensure medium-term sustainability, there is a need for difficult decisions on both sides difficult decisions in Greece regarding reforms, and difficult decisions among Greece's European partners about debt relief," a senior IMF official said.

The European Union agreed that this position was "fully compatible" with its own agenda on a Greek bailout, which could be worth up to 86 billion euros (USD 94 billion).

The EU aims to conclude negotiations for a third bailout

"with the expertise of the IMF, and then to consider debt measures later in the year," said European Commission spokeswoman Mina Andreeva.

In Athens, the heads of the audit mission met with the Greek ministers of finance and economy with the talks focusing on bank recapitalisation, privatisations and fiscal targets, the finance ministry said.

"There was convergence on some issues, less on others. The discussion was held in a very good climate and will

continue," said Finance Minister Euclid Tsakalotos.

The government hopes to conclude the EU-IMF fiscal audit before August 20, when it is scheduled to repay 3.4 billion euros to the European Central Bank including interest.

It will also be nervously eyeing Monday's reopening of the Athens Stock Exchange, when normal operating procedures

will resume for foreign investors although locals will still face limits on their transactions.

Greek investors will not be able to finance the purchase of securities by taking money from their bank accounts in Greece. They will, however, be able to use foreign bank accounts or make cash transactions.

The volatility cap will be reduced from 30 percent to 20 percent during the first three days of trading, as analysts predict a hectic first session. Greek Prime Minister Alexis Tsipras faces strong criticism from hardliners in his leftist Syriza party who say that applying the terms of the bailout are a betrayal of Syriza's electoral pledge to end austerity.

Tsipras, who turned 41 this week, is trying to regain control after a damaging mutiny by over 30 lawmakers in response to the austerity measures in the new bailout. The government had to rely on opposition MPs twice to push the reforms which include sales tax hikes, a pension overhaul and privatisations through parliament this month.